The purpose of this thesis is to analyze the impact of declining defense budgets on the JMSDF. Because of the huge debt of the Government of Japan (GOJ) and financial structural reform, the GOJ is trying to reduce all expenditures, including defense expenditures. Conversely, Japan and countries in its vicinity face the threat of uncertainty. China is increasing its defense budget to build a modern oceanic navy. North Korea recently conducted a nuclear test despite the overwhelming opposition of the international community. Therefore, it is a big challenge for the JMSDF to sustain and develop its capabilities under the pressure of the budget and the national security environment.